Why Every Family Needs a Nanny Contract
You have found the right person. The interviews went well, the references checked out, and your children already adore her. Now comes the step that many families skip — and later regret: putting the arrangement in writing.
A nanny contract is not a sign of distrust. It is a sign of professionalism. It protects your nanny by spelling out exactly what she is being paid and what is expected of her. It protects your family by establishing clear policies before misunderstandings arise. And it protects the working relationship by giving both parties a shared document to refer back to when questions come up months down the road.
Employment attorneys and nanny placement specialists consistently recommend written agreements for all household employment arrangements, regardless of whether the position is full-time, part-time, or temporary. The few hours you invest in drafting a thorough contract will save you from far more difficult conversations later.
This guide walks you through every section your nanny contract should include, explains why each clause matters, and provides template language you can adapt for your own family. If you are still in the process of finding a nanny, our complete guide to hiring a nanny covers the full process from start to finish.
What Is a Nanny Contract?
A nanny contract — sometimes called a nanny work agreement or household employment agreement — is a written document that outlines the terms and conditions of the employment relationship between a family and their nanny. It is distinct from a job offer letter, which is typically a brief summary of compensation and start date. A contract goes deeper, covering schedules, responsibilities, paid time off, sick leave, termination procedures, confidentiality, and any other terms both parties agree to uphold.
In most states, household employees are covered by federal and state labor laws, including minimum wage requirements, overtime rules, and in many cases, workers' compensation and unemployment insurance. A written contract helps ensure your arrangement complies with these requirements and gives both parties a clear record of what was agreed upon.
It is worth noting that a nanny contract is not a substitute for legal advice. If your arrangement is complex — for example, if you are setting up a nanny share with another family, or if your nanny will be living in your home — consulting an employment attorney before finalizing the agreement is a worthwhile investment.
The Essential Sections of a Nanny Contract
A well-drafted nanny contract covers the following areas. The sections below include both an explanation of why each clause matters and sample language you can use as a starting point.
1. Parties and Effective Date
Begin with the basics: the full legal names of the employer (the family) and the employee (the nanny), the address of the household, and the date the agreement takes effect. This section establishes who is bound by the contract and when.
Template language: "This Nanny Employment Agreement ('Agreement') is entered into as of [Start Date] between [Parent/Guardian Name(s)] ('Employer'), residing at [Home Address], and [Nanny Full Legal Name] ('Employee')."
2. Position and Job Description
Describe the role clearly. Include the job title, the ages and names of the children in care, and a summary of primary responsibilities. This section prevents scope creep — the gradual addition of duties that were never discussed during the hiring process.
Template language: "Employee is hired as a full-time Nanny to provide childcare for [Child Name(s)], ages [X] and [X]. Primary responsibilities include supervision and safety, age-appropriate activities and enrichment, meal preparation for the children, light housekeeping related to the children (tidying play areas, children's laundry), and transportation to and from school and activities as needed."
If there are duties the nanny will not be expected to perform — such as cleaning the parents' areas of the home, caring for pets, or running household errands — note those exclusions explicitly. Clarity now prevents resentment later. For a thorough list of questions to discuss before drafting this section, see our guide to nanny interview questions.
3. Schedule and Hours
Specify the regular work schedule in detail: which days of the week, what start and end times, and the total expected hours per week. If the schedule varies by day, list each day individually. If overtime is possible, address it here.
Template language: "Employee's regular schedule is Monday through Friday, 7:30 a.m. to 5:30 p.m., for a total of 50 hours per week. Any hours worked beyond 50 per week will be compensated at the overtime rate specified in Section 4. Employer will provide at least [X] days' notice of any schedule changes."
Federal law requires overtime pay (1.5x the regular hourly rate) for domestic workers who work more than 40 hours per week in most circumstances. Some states have additional requirements. Your contract should reflect the applicable rules for your state.
4. Compensation
This is one of the most important sections of the contract. Specify the hourly rate (or weekly salary), the pay period (weekly, bi-weekly, or semi-monthly), and the method of payment. If you are paying a weekly salary, note whether it covers a set number of hours and what happens when those hours are exceeded.
Template language: "Employer agrees to pay Employee a gross hourly rate of $[X.XX] per hour for all hours up to 40 per week, and $[X.XX] per hour (1.5x the regular rate) for all hours over 40 per week. Payment will be made via [direct deposit / check] on a [weekly / bi-weekly] basis, every [day of week]."
A critical note: nannies are employees, not independent contractors. Families are legally required to withhold and remit payroll taxes, including Social Security, Medicare, and federal and state income taxes. Using a household payroll service simplifies this process considerably. For a full breakdown of the costs involved in employing a nanny, including taxes and benefits, see our article on how much a nanny costs in 2026.
5. Benefits
List any benefits you are offering beyond base compensation. Common benefits for nannies include paid vacation, paid holidays, health insurance contributions, paid sick days, and annual raises. Even if you are not offering a full benefits package, document what you are offering so there is no ambiguity.
Template language: "Employee will receive [X] days of paid vacation per year, to be scheduled by mutual agreement with at least [X] weeks' notice. Employee will receive paid time off on the following holidays: [list holidays]. Employer will contribute $[X] per month toward Employee's health insurance premium. Employee is eligible for an annual performance review and merit increase after 12 months of employment."
6. Paid Sick Days and Personal Days
Sick day policy is one of the most common sources of conflict in nanny employment relationships. Address it directly. Specify how many paid sick days the nanny receives per year, whether unused sick days carry over, and what happens when the nanny is ill and cannot work.
Also address the reverse scenario: what happens when the family does not need the nanny because the parents are home, the children are sick and the family prefers to care for them alone, or the family goes on vacation? Most nanny contracts include a "guaranteed hours" provision that ensures the nanny is paid her regular wages even when she is not needed, up to a specified number of weeks per year.
Template language: "Employee will accrue [X] paid sick days per year, available for use after 90 days of employment. Unused sick days [do / do not] carry over to the following year. Employer guarantees Employee's regular weekly wages even when Employee is not needed due to family vacation, illness, or other circumstances, for up to [X] weeks per calendar year. Family vacations beyond [X] weeks per year will be [paid / unpaid] for Employee."
7. Duties and Household Responsibilities
Expand on the job description with a more detailed list of daily and weekly responsibilities. Be specific. "Light housekeeping" means different things to different people. If you expect the nanny to load the dishwasher after the children's meals, fold the children's laundry, and wipe down the kitchen counters, say so. If you do not expect her to mop floors or clean bathrooms, say that too.
This section can also address expectations around screen time, outdoor play, nap schedules, dietary restrictions, and any other caregiving preferences that are important to your family.
8. Transportation
If the nanny will be driving your children, address vehicle use in the contract. Specify whether she will use her own vehicle or a family vehicle, who is responsible for gas and maintenance, and what insurance requirements apply. If she uses her own vehicle, you should reimburse her at the current IRS mileage rate or a negotiated flat rate.
Template language: "Employee may be required to transport children using [Employee's personal vehicle / Employer's vehicle]. When using Employee's personal vehicle, Employer will reimburse Employee at the current IRS standard mileage rate for all work-related driving. Employee must maintain a valid driver's license and auto insurance with minimum coverage of $[X] per occurrence and must provide proof of insurance upon request."
9. Confidentiality
A confidentiality clause protects your family's privacy. It asks the nanny not to share information about your household, your children, your finances, or your personal lives with third parties. This is standard in household employment agreements and is not a reflection of distrust — it is simply good practice.
Template language: "Employee agrees to maintain strict confidentiality regarding all aspects of the Employer's household, family members, finances, and personal matters. Employee will not share confidential information with third parties during or after the term of this Agreement, except as required by law. This obligation survives the termination of this Agreement."
10. Social Media Policy
In the age of social media, it is worth adding a brief clause about posting photos or information about your children online. Many families ask that their nanny not post images of the children on social media without explicit permission.
Template language: "Employee agrees not to post photographs, videos, or identifying information about Employer's children or household on any social media platform without prior written consent from Employer."
11. Trial Period
A trial period — typically two to four weeks — gives both parties a low-stakes opportunity to assess the fit before committing to the full arrangement. During the trial, either party can end the relationship without the notice period that would otherwise apply.
Template language: "The first [14 / 30] days of employment constitute a trial period. During this time, either party may terminate this Agreement with [24 hours / 3 days'] notice and without additional obligation. Upon successful completion of the trial period, the full terms of this Agreement take effect."
12. Termination and Notice
Specify the notice period required for voluntary resignation and for termination by the employer. Two weeks is standard for both parties, though some families offer longer notice periods for long-tenured nannies. Address whether severance will be offered and under what circumstances.
Template language: "Either party may terminate this Agreement with [two weeks'] written notice. Employer reserves the right to terminate this Agreement immediately for cause, including but not limited to dishonesty, neglect of duties, or conduct that endangers the safety of the children. In the event of termination without cause by Employer, Employee will receive [two weeks'] severance pay in addition to any accrued vacation pay."
13. Dispute Resolution
Include a brief clause addressing how disputes will be handled. Many families prefer mediation over litigation for household employment disputes, as it is faster and less adversarial.
Template language: "In the event of a dispute arising from this Agreement, both parties agree to attempt resolution through good-faith negotiation. If negotiation fails, both parties agree to submit the dispute to mediation before pursuing any other legal remedy."
A Note on Nanny Taxes
One of the most important — and most frequently overlooked — aspects of nanny employment is the tax obligation. Families who pay a household employee more than a certain threshold per year (currently $2,700 for 2025) are required to withhold and pay Social Security and Medicare taxes, and may be required to pay federal and state unemployment taxes as well. This is commonly known as the "nanny tax."
Failing to comply with nanny tax requirements can result in penalties, back taxes, and interest. It can also create problems for your nanny, who may not be able to collect unemployment benefits or qualify for Social Security credits if her wages were paid off the books.
Household payroll services handle the calculations, filings, and remittances on your behalf, typically for a modest monthly fee. Many families find this a worthwhile expense given the complexity of the requirements. Your nanny contract should reflect the legal employment relationship, including the fact that taxes will be withheld from each paycheck.
Common Mistakes Families Make
Even well-intentioned families make avoidable errors when drafting nanny contracts. The most common mistakes include using a generic template without customizing it for your state's labor laws, failing to address overtime and guaranteed hours, leaving the sick day and vacation policy vague, and omitting the social media and confidentiality clauses entirely.
Another frequent mistake is treating the contract as a one-time document rather than a living agreement. As your children grow, your needs will change. Your nanny's responsibilities may expand. Compensation should be reviewed annually. Build in a provision for annual reviews and contract updates so the agreement stays current.
Finally, some families skip the trial period clause because they are eager to get started. This is understandable, but a trial period protects both parties. If the fit is not right, it is far easier to part ways during a defined trial than after the full arrangement is in place.
What to Do After Both Parties Sign
Once the contract is signed, both parties should keep a copy. Store yours somewhere accessible — you may need to refer to it when questions arise about vacation scheduling, overtime, or notice requirements. Review the contract together at least once a year, ideally at the same time as the nanny's annual performance review and compensation discussion.
If circumstances change significantly — a new child, a change in schedule, a move to a new home — update the contract in writing. A brief addendum signed by both parties is sufficient for minor changes. For major changes, consider drafting a new agreement entirely.
How Crown Nannies Supports Families Through the Placement Process
At Crown Nannies, we guide families through every step of the hiring process — including the paperwork. When we place a nanny with your family, we provide guidance on what your work agreement should cover and connect you with resources for nanny tax compliance. Our goal is not just to find you the right caregiver, but to help you build a working relationship that lasts.
If you are still in the process of finding a nanny, our comparison of nanny agencies vs. DIY hiring explains how working with a placement specialist saves time, reduces risk, and often results in a better long-term match. And once you have your nanny in place, our interview question guide can help you prepare for the conversations that matter most before you reach the contract stage.
To learn more about working with Crown Nannies, call us at 209-352-8838, email hanna@crownnannies.com, or submit a family inquiry through our website. We would be glad to walk you through our process and answer any questions you have about household employment in the Hudson Valley.